USURY

[sweettractors]

I have had a Visa card issued by Chase for at least 8 years now, it is my primary card. During all those years I have only had to pay a late fee one time, and that was because my mailbox was destroyed by a snowplow and the bill blew away in the wind, but the charge was reasonable, and that was the only time I have ever paid a late fee and interest. Think it was about $27 total. I always pay off my account in full every month, but now, because of the changes in the laws, if I am one day late I get socked with a $35 late fee and my APR goes from 14% to nearly 30%.

What galls me even more is that if I am given a credit by a merchant that is applied to my balance during the period before my payment is due, I do not get credit for that as a "payment", Suppose I have a balance of $100 on my card, and a merchant gives me a credit of $99 to my balance before the $100 is due. Unless I pay them at least a dollar, I end up owing the $35 late fee and interest. Why are credits to my account not considered a payment of sorts?

I had a Mastercard I carried as a backup card, rarely used it. The card issuer told me last year they would charge me a fee of $60 a year to keep the card, and if I charged $1500 a year on it they would credit my account for the $60 fee. Bull roar. So I cancelled.

What makes me most angry about the credit card companies is that even if you have a spotless payment record going back ten years, they will c--- on you for the slightest reason. Know what I find really weird? I carry one card, which is always paid in full every month and I carry a very high credit limit that I don't get close to in a years time if I totaled up every charge I made. My wife has multiple credit cards and carries a balance on them all and pays interest on all of them...she sharges more in a month than I do in six months.

And guess who has a better credit score..she does. If that isn't a farce I don't know what is...

Cardholders that always pay off the card balance every month are the ones that the card companies do not make any money on. Ken Sweet

 

[chrisott]

Ken,

That's not entirely true. The credit card companies do not make interest on our balances, but as you know they make 3% on our charges. I remind them of that when I call to have charges removed. Actually, we are referred to as "deadbeats" in the credit card industry because we don't carry a balance.

I hope you have a good 2011, Ken.

Chris

 

[ultrarunner]

Most credit card agreements with merchants don't permit them to offer discounts for cash. If you get a better deal for cash, the merchant is breaking his agreement with the bank.

Yes, their fees are too high, so my business doesn't accept payment by credit card. It's a necessity for some.

This is my understanding too... I've reported a merchant that was charging higher for credit cards and was told by the Card Company I should not shop there if this is a problem...

She went on to say the agreement is confidential between the merchant and issuer...

When I worked in a small retail auto parts business the merchant agreement explicitly stated we could not charge more for customers paying by credit card.

 

[blueriver]

I read somewhere that credit cards offering 'points' towards rewards essentially charge the cost of that back to the merchant. True?
Dave.

The merchant gets the but end of it ... either points or fees ... the only thing merchants can do is adjust the sales price to cover the expense. I often wonder how much the actual retail price would be if everyone eliminated all the hidden cost.

 

[blueriver]

Ken,

That's not entirely true. The credit card companies do not make interest on our balances, but as you know they make 3% on our charges. I remind them of that when I call to have charges removed. Actually, we are referred to as "deadbeats" in the credit card industry because we don't carry a balance.

I hope you have a good 2011, Ken.

Chris

Chris ... yes, no balance no interest ... they don't like us!! Above and beyond the 3% add the merchant charges ... 15 cents to swipe a card, more to manually enter it, monthly fee's, annual membership fees, and this year a new $89.99 government fees .... and they also have certain transactions that are considered high risk ... AND do not call in and ask for authorization ... that will really nail a merchant!!

 

[blueriver]

This is my understanding too... I've reported a merchant that was charging higher for credit cards and was told by the Card Company I should not shop there if this is a problem...

She went on to say the agreement is confidential between the merchant and issuer...

When I worked in a small retail auto parts business the merchant agreement explicitly stated we could not charge more for customers paying by credit card.

This has changed ... I can charge what I feel is a reasonable account fee. My processor says it is a premuium established by the retailer ... I guess thats where the term "Buyers Premium" comes into play.

 

[dave1949]

The merchant gets the but end of it ... either points or fees ... the only thing merchants can do is adjust the sales price to cover the expense. I often wonder how much the actual retail price would be if everyone eliminated all the hidden cost.

Thanks, and to JimmyJ thank you too. I have two visa debit/credit cards except I opted out of overdraft coverage, so they are really only debit cards. When a merchant asks me debit or credit, I tell them to do which ever is less expensive for them. Either way, it's an immediate debit on my account.

I think consumers could use more education on the topic from the merchant's point of view. Since the thing about points/rewards/miles is true, the card companies are giving us back our own money - and only some of it at that

Maybe if more people realized it's just an expensive scam, they would apply some consumer pressure. I used to travel for work and I know you better be packing about three credit cards with healthy limits if you want to function. But for local business; groceries, gas, etc. maybe we should convert to cash.
Dave.

 

[sweettractors]

Ken,

That's not entirely true. The credit card companies do not make interest on our balances, but as you know they make 3% on our charges. I remind them of that when I call to have charges removed. Actually, we are referred to as "deadbeats" in the credit card industry because we don't carry a balance.

I hope you have a good 2011, Ken.

Chris

I love it when my card company calls me a deadbeat. You have a good 2011 as well. Ken Sweet

 

[not2old]

When I got hit with late charges once, I called to inquire and said I usually paid my account promptly but had been on a holiday, and since the payment was only one day late, could they please check the charges for accuracy. When told they were correct and nothing could be done, I asked to have my acount closed right then and there because I didn't want this to happen again. It didn't take more than two seconds before a supervisor offered to credit the charges if I would reconsider the cancellation. My card (mostly business) sees about $100,000 per year and they make PLENTY OF PROFIT on that even with no interest charges. It helps that I usually pay the balance right away rather than wait for the due date.

I don't know whether I hate banks or goverment the most.

 

[ultrarunner]

One of my biggest pet peeves was payment due date creep...

I have a mortgage and it's due the same day each month for the next 30 years...

Another is getting a new card in the mail, calling in and being told I'm good to go... drive to Sears to buy a set of tires and refrigerator and have the card I called 12 hours before be declined and informed it was closed 11 weeks ago... a card I've had for 30 years.

Don't get me started on HELOC's... had one 5 years and got a noticed saying it was being cancelled AT MY REQUEST??? I called in to explain I didn't request anything and was told sorry for the mistake... line of credit is cancelled anyway. A week later I get a call from BofA asking me to rate their service... tell them the business has been with them since 1948... says so on my checks and they cancelled my line. A week later, I'm told I can reapply... my loan to value was 40%... go figure?

Probably can tell I'm not a fan of Banks... ever since are little 12 branch Savings and Loan was taken over... Banking has never been the same. Savings and Loan gave my Brother a credit card at age 16 with no co-signer with a $200 credit limit... the Branch Manager said he was going out on a limb because the Bank could not collect if he choose not to pay being a minor... we were all loyal to the company and my brother went on to send millions of dollars in Real Estate Loans their way because customers were treated as individuals...

pardon my rant.... my scores have never been higher... guess they don't need or want my business.